Europe’s ambition to double its electrification rate by 2040 could create new opportunities for corporate renewable Power Purchase Agreements (PPAs) to attract private investment in wind and solar power. However, barriers related to grid capacity, storage and permitting continue to limit renewable energy deployment, according to the RE-Source Platform, which is highlighting these challenges at the RE-Source 2026 event, taking place in Amsterdam on 4–5 November.
With gas prices rising, the need for home-grown electricity has become increasingly important for Europe’s energy security and industrial competitiveness. Electrification is also a means of giving businesses access to more affordable and predictable electricity.
Corporate renewable PPAs allow businesses to purchase renewable electricity at agreed terms, providing them with access to competitive power while giving wind and solar projects greater long-term revenue certainty. A stronger PPA market could therefore reduce businesses’ exposure to fluctuating gas prices and support investment in new renewable capacity.
In July, the European Commission published its Electrification Action Plan, which sets a target of increasing Europe’s electrification rate to 46% by 2040, effectively doubling the current rate. The plan recognises the need to remove barriers to PPAs, although further policy measures are needed to translate this ambition into increased market-driven electrification.
So far in 2026, Europe has contracted 5.9 GW of renewable capacity through corporate PPAs, representing a 9.7% decline compared with the same period in 2025. The market is facing pressure from more frequent periods of zero and negative electricity prices. These increase risks for both buyers and sellers and can make long-term, pay-as-produced agreements less attractive, particularly for businesses that cannot easily adjust their electricity consumption.
One proposed measure is to recognise PPAs as part of the European Union's decarbonisation solutions and support them through the EU Emissions Trading System (ETS) Investment Booster. This could help mobilise private investment in electrification. Recognising Guarantees of Origin in carbon accounting could also encourage investment in renewable capacity and ensure that businesses receive appropriate recognition for their use of renewable electricity.
On the demand side, greater flexibility in electricity consumption, increased storage capacity, stronger grids and well-designed support schemes are needed to reduce market risks and maintain the business case for corporate renewable procurement.
On the supply side, wind power deployment is on track for a record year in 2026, while solar deployment remains close to the record level achieved in 2024. However, insufficient investment in modern electricity grids and battery storage, together with slow permitting procedures, continues to constrain both technologies. Addressing these barriers could reduce curtailment and periods of negative electricity prices, improve investment conditions and accelerate the construction of renewable energy projects.
